JOHANNESBURG - Gold producer AngloGold Ashanti said yesterday it was planning to engage the government of Tanzania on proposed new laws and regulations that would affect mining in that country.

The group said it wanted assurances that the Geita Gold Mine would not be affected by these legal and fiscal changes.

“AngloGold Ashanti’s subsidiaries are seeking a constructive dialogue with the government of Tanzania, to gain assurances that the Geita Gold Mine in Tanzania will not be affected by these legal and fiscal changes, given the Mine Development Agreements which guarantee fiscal and regulatory stability as well as agreement between all parties before material legal and regulatory changes are made. In these circumstances, the company’s subsidiaries have, however, had no choice but to take the precautionary step of safeguarding its interests by commencing international arbitration proceedings as first announced in July 2017,” the company said.

Last year Tanzania enacted three pieces of legislation - the Natural Wealth and Resources Contracts Bill, the Natural Wealth and Resources Bill and the Written Laws Act. The laws introduce sweeping changes to the legal and regulatory regime governing Tanzania’s natural resources extractive industry.

AngloGold Ashanti yesterday said it had lowered its debt, improved production and raised cash flows. It said the cash flows from operating activities rose 26percent to $117million (R1.46billion), while it reduced debt by 14percent to $1.77bn.

“Our hard work in restructuring the business to focus on portfolio quality is starting to bear fruit, as our operations are demonstrating strong, consistent results. The core portfolio is performing well, the balance sheet is solid, our projects are on schedule and we see good potential for further efficiencies in both our international and South African operations,” said Venkatakrishnan.

The group attributed the increase in cash costs to a 10percent strengthening year-on-year of the rand against the US dollar, as well as a 4percent strengthening of the Australian dollar against the US dollar.

The company said production of retained operations - which excludes sold assets such as Moab Khotsong and Kopanang mines, as well as TauTona, which is being closed - was up 6percent year-on-year, from 726000 ounces to 773000 ounces. It said overall production rose from 824000 ounces to 830000 ounces in the first quarter. However, production costs rose to $834 from $813 an ounce in the first quarter.

Rene Hochreiter, an analyst at Noah Capital Markets, said the company’s focus on cost containment was paying off. Hochreiter said the production forecast and costs were on target. He said the company’s decision to dispose of some of its South African assets was prudent. “South Africa was bleeding the company. Khotsong is a better asset to Harmony than it was to AngloGold Ashanti,” he said.

AngloGold Ashanti shares rose 0.15percent on the JSE yesterday to close at R109.16.